SECTOR COMMENTARY

Energy stocks followed the broader markets higher with the sector being led by the E&Ps which benefitted from the surge in natural gas prices. Integrateds were the laggards due to pressure from ExxonMobil whose shares fell nearly 1% following a downgrade which triggered profit-taking on the recent rally ahead of the company’s earnings release.

Oil services were mixed with Halliburton shares exhibiting nearly 2% losses despite beating earnings estimates after the company said it expected a seasonal decline in first-quarter revenue in Latin America and that margins there would be more "severe than normal" due to higher costs in Brazil and reduced land drilling in Mexico. Meanwhile, shares of rival Baker Hughes rallied over 4% after the company bested estimates and said increased profitability in North America would offset a seasonal decline in its international and industrial businesses in the first quarter.

WTI crude oil gained $0.62 or 0.66% to $94.99 upon the expiry of the front-month contract as the International Energy Agency raised its forecast for global oil demand this year, citing accelerating economic growth. News that Libya's oil minister resigned also fueled a technical rally, driving prices up and pushing some traders holding short positions out of the market.

Natural gas futures spiked $0.105 or 2.43% o $4.431 and cash prices for next-day delivery rose to an all-time high as skittish traders reacted to the MDA Weather Services report which called for extremely frigid temperatures in the one-to-five-day and six-to-10-day forecasts for the eastern half of the country.

U.S. INTEGRATEDS

(Late Friday) Deutsche Bank discontinued coverage of Exxon Mobil, Hess Corp, Occidental Petroleum and Chevron.

Reuters - Exxon Mobil Corp said on Tuesday its new hydrotreater has started operations and is producing ultra-low sulphur diesel at its 592,000 barrels per day (bpd) Singapore refinery

Press Release - InterOil Corporation today announced the appointment of Mr. Jon Ozturgut as Chief Operating Officer and Mr. Donald Spector as Chief Financial Officer, with immediate effect.

INTERNATIONAL INTEGRATEDS

(Late Friday) Reuters - Petrobras restarted a sulfur recovery unit at its 100,000 barrel-per-day refinery in Pasadena, Texas, according to a filing with state pollution regulators on Friday.

(Late Friday) Reuters - Petrobras has launched a voluntary layoff plan that could involve about 10 percent of its employees, the workers' union said on Friday.

(Sunday) Reuters - Royal Dutch Shell and Mubadala Petroleum have swapped equity stakes in two exploration blocks off Malaysia, the Abu Dhabi-based energy company said on Sunday.

(Monday) Press Release - Royal Dutch Shell plc today announced it has agreed to sell its 8% equity interest in the Wheatstone-Iago Joint Venture and 6.4% interest in the 8.9 million tonnes per annum Wheatstone liquefied natural gas (LNG) project in Western Australia for a cash consideration of US$1,135 million to the Kuwait Foreign Petroleum Exploration Company (KUFPEC), subject to closing.

(Monday) Reuters - Royal Dutch Shell's head of international upstream activities, Andy Brown, is to take extended leave, effective immediately, to recuperate from a recent medical procedure, the oil company said on Monday.

CANADIAN INTEGRATEDS

(Late Friday) Deutsche Bank discontinued coverage of Suncor Energy.

U.S. E&PS

(Late Friday) Deutsche Bank discontinued coverage of ConocoPhillips,CVR Energy, Marathon Oil and Murphy Oil.

(Late Friday) Press Release – Chesapeake Energy Corporationannounced that it has completed the sale of 100% of its ownership interest in Chaparral Energy, Inc. (Chaparral). The transaction closed on January 13, 2014 for gross proceeds of $215 million.

Suntrust raised its rating on Chesapeake Energy to ‘Buy’ from ‘Neutral’.

(Late Friday) Press Release – EXCO Resources, Inc. announced the closing of its previously announced $273 million rights offering and related transactions under exercise commitment agreements with certain shareholders of the Company.

Press Release - Pioneer Natural Resources Company today reported fourth-quarter 2013 production and the production impact attributable to the previously-announced severe winter weather in Texas.

CANADIAN E&PS

(Late Friday) Deutsche Bank discontinued coverage of Canadian Natural.

Global Hunter raised its rating for Canadian Natural to ‘Buy’ from ‘Accumulate’.

(Monday) Press Release - Pacific Rubiales Energy Corp. announced today that it has commenced start-up of its Petroeléctrica Los Llanos ("PEL") electrical power transmission line, which connects the Company operated Rubiales and Quifa oil fields to Colombia's electrical grid.

Press Release - Whitecap Resources Inc. announced the results of its 2013 year-end oil and gas reserves evaluation, a 51% increase over year-end 2012 reserves. The increases reflect exceptional organic growth through the drill-bit and the completion of several accretive oil acquisitions in 2013. Whitecap is also pleased to provide our shareholders with an operational update.

OIL SERVICES

• BHI reported 4Q’13 EPS of $0.62 versus Thomson Reuters I/B/E/S estimate of $0.61.

• HAL reported 4Q’13 EPS of $0.93 versus Thomson Reuters I/B/E/S estimate of $0.89.

Press Release - Baker Hughes Incorporated announced today results for the fourth quarter of 2013. Adjusted net income for the fourth quarter of 2013 excludes after-tax severance charges of $29 million ($0.06 per diluted share), but includes after-tax losses of $79 million ($0.18 per diluted share) in Iraq. The losses in Iraq are primarily related to the significant disruption of operations previously announced during the quarter, expenses associated with personnel movements and security measures, and other nonrecurring items. Adjusted net income for the third quarter of 2013 and the fourth quarter of 2012 include after-tax charges of $42 million ($0.09 per diluted share) and $63 million ($0.14 per diluted share), respectively, for bad debt provisions in Latin America. lease see Table 1 for a reconciliation of GAAP to non-GAAP Financial Measures.

Imperial Capital initiated coverage of Basic Energy Services Inc with an ‘Outperform’ rating.

(Monday) Press Release - Cameron today announced that it has entered into a definitive agreement under which it will sell its Reciprocating Compression business to GE for cash consideration of approximately $550 million, subject to closing adjustments. Cameron also announced that it intends to explore strategic alternatives for its Centrifugal Compression business to further enhance the Company's focus on its core businesses. The Company intends to use the net cash realized from the divestiture of the Reciprocating Compression business to partially fund its existing share repurchase program.

Press Release – Halliburton announced today that income from continuing operations for the fourth quarter of 2013 was $798 million, or $0.93 per diluted share, excluding restructuring charges of $28 million, after-tax, or $0.03 per diluted share. This compares to income from continuing operations for the third quarter of 2013 of $745 million, or $0.83 per diluted share, excluding restructuring charges of $38 million, after-tax, or $0.04 per diluted share.

Credit Suisse raised its rating on Schlumberger to ‘Outperform’ from ‘Neutral’.

(Late Friday) Reuters - Weatherford International Ltd says U.S. district court approved settlement agreements between co and some of its subsidiaries and U.S. DOJ - SEC filing. Agreements resolve investigations for prior alleged violations by co of some trade sanctions laws, actions on Iraq oil-for-food program. Says terms of settlement and court's orders are consistent with co's prior ublic disclosure regarding these matters

DRILLERS

Morgan Stanley lowered its rating on Noble Corp to ‘Equal Weight’ from ‘Overweight’.

(Monday) Press Release - North Atlantic Drilling Ltd. announced today that it intends to offer US$600 million in aggregate principal amount of unsecured senior notes due 2019 (the "Notes") in a private offering within the United States to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"), and to certain other persons outside of the United States in reliance on Regulation S under the Securities Act.

Press Release - Rowan Companies plc announced today that its monthly report of drilling rig status and contract information has been updated as of January 21, 2014.

REFINERS

Reuters - Phillips 66 said it responded to a small process unit fire after a leak at its 333,000 barrel per day (bpd) joint-venture refinery in Wood River, Illinois, on Tuesday morning.

(Monday) Reuters - Western Refining Inc said on Monday that it has started work on the planned turnaround on the south side of the 122,000-barrel-per-day El Paso, Texas, refinery.

MLPS

(Late Friday) Deutsche Bank discontinued coverage of Alon USA, Delek US, HollyFrontier, Marathon Petroleum and Phillips 66.

Press Release - The Crosstex Energy companies today announced the declaration of the quarterly distribution for Crosstex Energy, L.P. and the quarterly dividend for Crosstex Energy, Inc. from the fourth quarter of 2013.

(Sunday) Reuters - Enbridge Inc restarted its 450,000 barrel-per-day (bpd) Alberta Clipper pipeline after an oil spill at a Saskatchewan pump station prompted the company to shut down the line.

Press Release - Oiltanking Partners, L.P. announced today that the board of directors of its general partner declared a cash distribution of $0.47 per unit, or $1.88 per unit on an annualized basis, for the fourth quarter of 2013. The fourth quarter distribution represents a 5.6% increase over the prior quarter distribution of $0.445 per unit and a 20.5% increase over the prior year distribution of $0.39 per unit. The distribution will be paid on February 14, 2014, to unitholders of record on February 3, 2014.

Press Release - The Board of Directors of Valero Energy Partners LP (NYSE: VLP) has approved the partnership's fourth quarter 2013 cash distribution of $0.037 per unit. This is the first distribution declared by the partnership and corresponds to the minimum quarterly distribution of $0.2125 per unit, or $0.85 per unit annually. The amount is prorated for the partial quarter following the closing of Valero Energy Partners LP's initial public offering on December 16, 2013. The distribution is payable on February 12, 2014 to unitholders of record at the close of business on January 31, 2014.